Justia New York Court of Appeals Opinion SummariesArticles Posted in Bankruptcy
Lubonty v. U.S. Bank National Ass’n
The Court of Appeals affirmed the Appellate Division's order affirming Supreme Court's dismissal of Plaintiff's action brought under N.Y. Real Prop. Acts. Law 1504(1) to discharge a mortgage on grounds that the statute of limitations on Defendant's foreclosure claim had expired, holding that Defendant's claims were not time barred. Under N.Y. C.P.L.R. 204(a), New York law tolls the statute of limitations where the "commencement of an action has been stayed by a court or by statutory prohibition." At issue was whether the bankruptcy stay of any judicial proceedings against a debtor upon the filing of a bankruptcy petition qualifies as a "statutory prohibition" under section 204(a). Defendant filed two foreclosure actions against Plaintiff, Plaintiff filed two bankruptcy petitions, and automatic bankruptcy stays were imposed. Plaintiff brought this action asserting that the statute of limitations on Defendant's foreclosure claim had expired. Defendant moved to dismiss, arguing that the statute of limitations had not expired because it was tolled while the bankruptcy stay was in effect. Supreme Court dismissed, and the Appellate Division affirmed. The Court of Appeals affirmed, holding (1) the bankruptcy stay is a "statutory prohibition" within the ambit of the New York tolling statute; and (2) Defendant's claims were not time barred when Supreme Court granted Defendant's motion to dismiss. View "Lubonty v. U.S. Bank National Ass'n" on Justia Law
Matter of Santiago-Monteverde
Debtor lived in a rent-stabilized apartment for over forty years. Debtor filed for Chapter 7 bankruptcy and listed the value of her unexpired rent-stabilized lease as personal property exempt from the bankruptcy estate under N.Y. Debt. & Cred. Law 282(2) as a “local public assistance benefit.” The bankruptcy court struck the claimed exemption, concluding that the value of the lease did not qualify as an exempt local public assistance benefit. The district court affirmed. Debtor appealed, arguing that the value of her lease was a local public assistance benefit that was exempted from her bankruptcy estate. The Second Circuit certified a question to the New York Court of Appeals regarding the issue. The Court of Appeals answered that section 282(2) exempts a debtor-tenant’s interest in a rent-stabilized lease. View "Matter of Santiago-Monteverde" on Justia Law
In re Thelen LLP
These two cases involved the dissolution of two separate law firms. After the law firms’ dissolution, the partners joined other law firms, which took on unfinished legal matters from the dissolved law firms’ former clients. The dissolved law firms subsequently filed for bankruptcy. Separate adversary proceedings were brought against the law firms that hired the dissolved law firms’ partners. The lawsuits were premised on the unfinished business doctrine, and the plaintiffs sought to recover the value of the dissolved law firms’ business for the benefit of the estate’s creditors. At issue before the Court of Appeals was whether, for purposes of administering a related bankruptcy, New York law treats a dissolved law firm’s pending hourly fee matters as its property. The Court of Appeals held that pending hourly fee matters are not partnership property or unfinished business within the meaning of New York’s Partnership Law, as a law firm does not own a client or an engagement and is only entitled to be paid for services actually rendered. View "In re Thelen LLP" on Justia Law
People v First Am. Corp.
This appeal arose out of an action commenced by the New York State Attorney General against defendants, seeking injunctive and monetary relief as well as civil penalties for violations of New York's Executive Law and Consumer Protection Act, Executive Law 63(12) and General Business Law 349, as well as the common law. The primary issue on appeal was whether federal law preempted these claims alleging fraud and violations of real estate appraisal independence rules. The court held that the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) governed the regulation of appraisal management companies and explicitly envisioned a cooperative effort between federal and state authorities to ensure that real estate appraisal reports comport with the Uniform Standards of Professional Appraisal Practice (USPAP). The court perceived no basis to conclude that the Home Owners' Loan Act (HOLA) itself or federal regulations promulgated under HOLA preempted the Attorney General from asserting both common law and statutory state law claims against defendants pursuant to its authority under Executive Law 63(12)and General Business Law 349. Thus, defendants' motion to dismiss on the grounds of federal preemption was properly denied. The court also agreed with the Appellate Division that the Attorney General had adequately pleaded a cause of action under General Business Law 349 and that the statute provided him with standing. Accordingly, the order of the Appellate Division was affirmed. View "People v First Am. Corp." on Justia Law
ABN AMRO Bank, N.V., et al. v. MBIA Inc., et al.
This case stemmed from a dispute between MBIA Insurance Corporation (MBIA) and certain of its policyholders who hold financial guarantee insurance policies. The principal question presented was whether the 2009 restructuring of MBIA and its related subsidiaries and affiliates authorized by the Superintendent of the New York State Insurance Department precluded these policyholders from asserting claims against MBIA under the Debtor and Creditor Law and the common law. The court held that the Superintendent's approval of such restructuring pursuant to its authority under the Insurance Law did not bar the policyholders from bringing such claims. Accordingly, the court held that the order of the Appellate Division should be modified, without costs, in accordance with the opinion. View "ABN AMRO Bank, N.V., et al. v. MBIA Inc., et al." on Justia Law
The RGH Liquidating Trust v. Deloitte & Touche LLP, et al.
This case stemmed from Reliance Group Holdings, Inc.'s ("RGH") and Reliance Financial Services Corporation's ("RFS") voluntary petitions in Bankruptcy Court seeking Chapter 11 bankruptcy protection and the trust that was established as a result. The trust subsequently filed an amended complaint alleging actuarial fraud and accounting fraud against respondents. At issue was whether the trust qualified for the so-called single-entity exemption that the Securities Litigation Uniform Standards Act of 1998 ("SLUSA"), 15 U.S.C. 77p(f)(2)(C); 78bb(f)(5)(D), afforded certain entities. The court held that the trust, established under the bankruptcy reorganization plan of RGH as the debtor's successor, was "one person" within the meaning of the single-entity exemption in SLUSA. As a result, SLUSA did not preclude the Supreme Court from adjudicating the state common law fraud claims that the trust had brought against respondents for the benefit of RGH's and RFS's bondholders. Accordingly, the court reversed and reinstated the order of the Supreme Court. View "The RGH Liquidating Trust v. Deloitte & Touche LLP, et al." on Justia Law